Century Place Development Corp. is proposing a $12.2-million rehab of the 175-room single-room-occupancy Leland Hotel at 1201-13 W. Leland Ave., the southwest corner of the redevelopment site. Residents and community groups are nearly unanimous in supporting use of $1.25 million in tax increment financing to convert the dilapidated 89,717-sf SRO into 133 units with kitchenettes and separate bathrooms.

More controversial, however, has been a plan to give Wheeling, IL-based Joseph Freed Co. $5.5 million in TIF money to rehab a former Goldblatt's department store into 37 condominium units with 41,000 sf of retail space, anchored by a 25,000-sf, two-level Border's book store.

Although Freed officials have agreed to designate 20% of the one- and two-bedroom condominium units for "affordable," they continue to use 120% of median income as the standard, which community groups say is too high. In addition, opponents say setting aside 20% of the units for the "affordable" market is not enough in a neighborhood being engulfed by gentrification.

However, the entire project has won support from the Uptown Chamber of Commerce, Uptown Chicago Commission and Uptown Development Corp., even though the latter two groups bemoaned the loss of the Plymouth Hotel south of the Goldblatt's building in the rehab plans. Weighing in against the Goldblatt's makeover but for the Leland Hotel rehab were COURAGE and Organization of the Northeast.

Freed development manager Dennis Harder says the Goldblatt's project has been more than two years in the making as the company that has been active in suburban Downtown redevelopments as well as Downtown Chicago building makeovers has worked out details with city officials.

"We were attracted to Uptown because it has characteristics in common with a number of our suburban development sites," Harder says. Although the Uptown neighborhood is definitely urban, it is served by a major Chicago Transit Authority line, while Freed's suburban projects are along Metra commuter rail lines.

While critics point to a lack of guarantees, Harder says his company has a letter of intent from Border's to lease 25,000 sf and is confident the remaining retail space would be leased quickly.

"We saw the Goldblatt's sitting in a prominent location, and we saw it as an opportunity," Harder says. "We are committed to the community. We want to stay here."

Although many would prefer to see the Leland Hotel project go forward without the Goldblatt's redevelopment, Century Place executive officer Andrew E. Geer notes his group's portion may not be able to fly solo. Century Place, a non-profit housing corporation affiliated with the Heartland Alliance, is working with Freed on a financing mechanism "so both projects move ahead at the same time." Century Place, which has spent $450,000 on deferred maintenance such as new boilers, plumbing and a fire system, has $4.67 million in limited partnership equity but still has a financing gap.

The redevelopment would bring "stability and security" to the neighborhood, Geer says. "The corner of Leland and Racine has been a problem in the Uptown community because there haven't been the eyes and ears out on the street," Geer says.